The company who is the owner of trademark in dispute, is the owner of the following European Union trademarks for, inter alia, clothing, footwear and hats in class 25:

• Trademark no. 8 170 953, graphic, consisting of:

• Trademark No. 3.772.431, mixed, consisting of:

• Trademark No. 8.664.096, mixed, consisting of:

• And, Trademark No. 12 092 722, mixed, consisting of:

The company MPM acquired 21,480 original sandals of the Havaianas brand in Panamá and introduced them at the Bilbao customs office under customs warehousing arrangement. Subsequently, these products were offered and sold to HS for marketing in the European Economic Area (EEA), without having obtained the authorization of the trademark owner.

Article 9 of the Regulation, the infringement of which is complained of, sets out in paragraph 1 the scope of the ius prohibendi which registration of the trademark confers on its owner and then, in paragraph 2, specifies various forms of conduct by means of which that prohibition may be infringed. In subparagraph (b) it refers to “offering the goods, placing them on the market or stocking them for those purposes or offering or providing services under the sign”, and in subparagraph (c) to “importing or exporting the goods under the sign”.

The doctrine set out in the judgment of the Court of Justice of the European Union of 18 October 2015 is also applicable to this case because it indicates the cases in which the trademark owner may oppose the trader who has placed original goods bearing a trademark under the external transit procedure or the customs warehousing procedure: “if the offering or sale necessarily entails the marketing in the Community of the goods bearing the trademark, there is an infringement of the exclusive rights conferred on the owner of the trademark (…) The offering or sale, then constitutes “use [of the trademark] in the course of trade” within the meaning of Article 5(1) of the Directive and Article 9 (1) of the Regulation.”

The main conclusions to be drawn from this resolution are as follows:

1. A trader who has introduced original goods bearing a trademark under the external transit procedure or the customs warehousing procedure may infringe the rights of the trademark owner in certain cases;
2. the trademark owner may oppose the offering or sale of such goods, even if they are placed under the external transit or customs warehousing procedure, where they necessarily involve their being put on the market in the EU. However, the owner cannot invoke his right merely on the ground that he could later market them in the EEA; and,
3. the burden of proof of the offering or sale of the non-EU goods is on the trademark owner, with circumstantial evidence being sufficient and no direct proof that MPM knew that the Havaianas trademark goods were intended to be marketed within the EU. In this case, the Court concludes that it has been proved by circumstantial evidence (they were made available to the purchaser at the port of Dover and the sizing was adapted to that required in the United Kingdom, as was ultimately the case).

Therefore, as owners of a trademark, we can oppose the import and export of the goods associated with that trademark, as well as the offering and marketing of those products.

The Board of Directors of Inditex resolves the appointment of Marta Ortega as Chairwoman, and Óscar García Maceiras as CEO

The Board of Directors of Inditex, at the proposal of its Chairman Pablo Isla and its founder Amancio Ortega, and following the proposal of the Appointments Committee, has approved the appointment of Marta Ortega Pérez as Chairwoman of the Group, with the status of dominical director, an appointment that will be effective as from 1 April 2022, according to the relevant fact published today by CNMV (Spanish National Stock Market Commission).

Likewise, Óscar García Maceiras, until now General Secretary and Secretary of the Board, has been appointed CEO of Inditex. Óscar García will take over from Carlos Crespo González, who until now and for approximately two years has had a long career in the company after joining in 2001.

“We are enormously grateful to Pablo Isla for his extraordinary work and dedication over all these years. I would like to highlight his immense contribution, not only to our Group but also to the fashion industry in general. I have lived this company since my childhood and I have learned from all the great professionals I have worked with over the last 15 years. I have always said that I would dedicate my life to developing the legacy of my parents, looking to the future but learning from the past and in the service of the Company, our shareholders and our customers, wherever I am most needed. I am deeply honoured and committed by the trust that has been placed in me, and enormously excited about the future that we are all going to undertake together. Marta Ortega.

The new organisational structure incorporates a Management Committee, made up of executives from different corporate and business areas and with a long track record in the Group, as follow:

• Carlos Crespo González, General Manager of Operations, Sustainable and Digital Transformation, INDITEX, S.A. Digital, INDITEX
• Pablo del Bado Rivas, General Manager, PULL&BEAR
• Miguel Díaz Miranda, Chief Financial and Operations Officer, ZARA
• Ignacio Fernández Fernández, Chief Financial Officer, INDITEX
• Javier García Torralbo, General Manager of e-Commerce, ZARA
• Begoña López-Cano Ibarreche, Chief People Officer, INDITEX
• Beatriz Padín Santos, Women’s Director, ZARA
• Jorge Pérez Marcote, General Manager, MASSIMO DUTTI
• Óscar Pérez Marcote, General Manager, ZARA

The appointment of Carlos Crespo in 2019 was a foreseeable move, as he was considered until then, in fact, the number 2 of Pablo Isla, until now the Chairman of the Board of Inditex (and former CEO of the group), after his resignation today. His position as the group’s internal audit director had given him extensive knowledge of all the company’s departments. He was considered by many to be a “man of the house” and this led many to believe that he would be accepted by the whole team. However, it was also pointed out at the time that he had little connection with the product area, where Amancio Ortega’s trusted managers were and are to be found.

For some time now, there have been rumours of a change and reorganisation of the group’s management structure, motivated by the distrust of some of the executives close to Amancio Ortega, which presages the imminent departure of Carlos Crespo as CEO. Who will be his successor? This morning it was confirmed that he will be succeeded by Óscar García, until now Secretary General of the Board.

Until now the composition of the Board was as follows:

Source: www.inditex.com/es/compliance/buen-gobierno-corporativo/consejo

According to the last Annual Corporate Governance Report of Inditex, the chief executive officer (Carlos Crespo) as well as the executive chairman (Pablo Isla), would be entitled to receive a gross severance payment for an amount equivalent to 2 annual payments calculated on their respective fixed remuneration established for the current year, in the event that their contract is terminated unilaterally by the Company (as seems to have been the case), as well as the resignation of the managing director or the executive chairman due to certain causes (among these, company succession, or change of ownership of the company affecting more than 50% of the share capital or voting rights, provided that, at the same time, there is a significant renewal of the governing bodies or a change in the content and approach of its main activity, if the request for termination is made within 6 months following the occurrence of such succession or change. For these purposes, no succession or change of ownership shall be deemed to exist in the case of a direct or indirect family succession in the ownership of the company.

Pablo Isla and Carlos Crespo’s departure joins other departures that have taken place in recent months. Rodrigo Loderio (former Security Director), Antonio Abril Abadín (former General Secretary of the Board), Ramón Reñon (former Deputy General Manager to the Chairman), Ramón Rubio (former Financial Manager of Massimo Dutti) and Jordi Blasi (former Head of Zara’s men’s division) are some of the executives who have left the company.

Until now, Inditex has known how to listen to the market and take advantage of the right moment to review its structures and adapt its processes.

Related article: Inditex the company with the best corporate reputation

It was at this time when El Corte Inglés opened its shareholding to foreign investment, and it was the Qatari Sheikh Hamad Bin Jassim Bin Jaber Al Thani who acquired 10% of the company’s share capital for 1 billion euros. The company was valued at 10 billion euros, although this valuation was debatable and could have been slightly lower.

However, a few years later, in 2018, after suffering several years of family war and a change in the composition of the Board of Directors, the experts pointed out that the value of the company would not reach more than 4 or 5 billion euros.

This was the moment to analyze what strategic direction El Corte Inglés should take, being the European leader of department stores in the era of digitalization, something that seemed to be not exactly a compliment, given the massive closures and restructuring that were taking place worldwide and the consolidation of Amazon as a technological leader. Companies comparable to El Corte Inglés in the United States were closing, it was the “Retail Apocalypse”, as The Wall Street Journal had dubbed it at the time.

Moving from a model based on shop square metres to one in which El Corte Inglés could compete with the e-commerce giants was one of its major pending tasks.

The company’s proposal since then has involved the adoption of some vital measures, many of which are already a reality, and have been and are:

• Focus on e-commerce and omnichannel, also supported by a new App;
• focus on quality products and services and the shopping experience;
• transform its logistics process;
• create a real estate unit;
• relaunch Viajes El Corte Inglés and create its own training school;
• integrate Sanchez Romero to lead the premium food segment;
• expand its financial services;
• review and reinforce its corporate social responsibility policy; and
• launch a new shopping card in alliance with Mastercard.

Thus, the objective of the 2021-2026 Strategic Plan, which was approved in July this year, is to double the result with an Ebitda of 1,700 million euros, reduce debt by 60% (at the close of the 2020 financial year, it accumulated a debt of 3,811 million) and multiply online sales to represent 30% of the group’s turnover.

The reduction of this debt was made possible a few days ago thanks to the entry into the share capital of the Mutua Group (formerly known as Mutua Madrileña) with an 8% stake for 555 million euros. This agreement also includes the acquisition of 50.01% of the insurance division of El Corte Inglés for a further 550 million euros. In total, 1,105 million euros, which would be largely used to reduce debt. This indicates that the valuation of the company, which has been used in this last operation, has improved with respect to the 2018 estimates, and is 6,937 million euros.

All this suggests that a management model that is closer to the customer, that expands services and that is constantly being adapted, may be the key for not only El Corte Inglés but also for other businesses in the sector to be able to face the economic and social changes that are coming.

“Focusing obsessively on the customer as a priority is by far the best way to protect the vitality of Day 1 (…) customers are always wonderfully dissatisfied, even when they tell us they are happy. Even when they don’t know it, they always want something better. Staying on Day 1 requires patiently experimenting, accepting failures, planting the seeds and protecting the little trees that begin to grow (…) Day 2 is stagnation. Followed by irrelevance. Followed by painful decline. Followed by death. And that’s why it’s always Day 1 here. It is true that this kind of decline can happen very slowly. An established company can stay on Day 2 for decades, but the end result will come” (Bezos, 2017)

The celebration of World Cotton Day provides an opportunity to recognize the historical importance of cotton as a global commodity grown in more than 75 countries (5 continents) and to highlight the key role it plays in creating jobs and maintaining economic stability. According to the International Cotton Advisory Committee, annual cotton revenues are estimated at $41.2 billion, while the value of cotton trade amounts to $18 billion each year.

However, while recognizing the key role cotton plays in several countries, and its economic and social effects, it is remarkable that cotton prices have reached their highest level in 10 years. Droughts and heat waves have wiped out cotton harvests in the United States, the world’s leading cotton exporter and in India the monsoon season threatens the country’s cotton production. Therefore, one of the factors that is influencing the increase in cotton prices is extreme weather.

“Most-active U.S. cotton futures trading on the Intercontinental Exhange closed Tuesday up 3.8% at $1.09 a pound, keeping prices at their highest level since September 2011. Prices have risen 22% over the past 11 sessions” as noted by the Wall Street Journal, 5 October 2021.

Moreover, demand for cotton has increased, especially in China. In December 2020, the United States banned companies from importing cotton and other cotton products from the western Chinese region of Xinjiang (China’s largest cotton-producing area) because of concerns that the Uyghur ethnic group produced it through forced labor. This situation has forced Chinese companies to buy cotton from the United States and manufacture the products in China to sell them back to the United States and other markets.

According to the U.S. Department of Agriculture, China’s cotton consumption in the current season is expected to be 8.9 million metric tons. This is a 24% increase over the last two seasons, driven in part by increased demand for consumer goods in the wake of the pandemic.

However, rising cotton prices are not the only major concern facing apparel brands. Last month, for example, Nike said it had lost 10 weeks of production since mid-July due to factory closures in Vietnam and Indonesia. This, coupled with transit times that have nearly doubled from pre-pandemic levels, has led executives to warn that demand is likely to outstrip supply over the next few quarters.

This pressure on the different parts of the production chain could lead to an increase in clothing prices.

You can access the UNGA resolution of 30 August 2021 declaring 7 October each year as World Cotton Day, at the proposal of Benin, Burkina Faso, Chad, Côte d’ Ivoire and Mali at the following link.

Inditex maintains its leading position in the general ranking of companies and in the ranking of the Fashion sector.

Other companies in the fashion industry that stand out as companies with the best corporate reputation in Spain in 2021 are:

• Adidas, which reaches 57th place, after ranking 77th in 2020.
• Nike, which rises to 67th place, after ranking 79th in 2020.
• Mango, which is ranked 77th, after ranking 73rd in 2020.
• Ecoalf, which joins the list in 99th place.

In the cosmetics sector, L’Oreal (23rd), P&G (37th) and Unilever (75th) stand out.

Pablo Isla, chairman of the Inditex Group, has also stood out for yet another year as the second leader with the best reputation in Spain, behind Juan Roig, chairman of Mercadona, who heads the list. Amancio Ortega (Inditex) once again holds fourth place in this general ranking of leaders.

Javier Goyeneche, chairman and founder of Ecoalf, rises to 35th place from 54th and Marta Álvarez, chairwoman of El Corte Inglés, rises to 40th place from 70th.

Other leaders in the fashion industry who stand out in this list are: Isak Andic, co-founder, owner and president of Mango, who is placed and maintained at number 31; Víctor del Pozo, CEO of El Corte Inglés, who is placed at number 68; and Adriana Domínguez, executive president of the Adolfo Domínguez group, who is placed at number 94, entering the ranking this year.

In the 2021 sectoral ranking of companies, the 14 companies with the best corporate reputation in Spain are the following:

Source: Sectoral Ranking of Companies 2021, Merco. (*) companies that did not appear in the 2020 sector ranking.

Merco points out that, for the preparation of these lists, it carried out a study with more than 47,235 surveys, seven evaluations and 25 sources of information, verified through an independent review by KPMG. Merco also involved the participation of 1,110 executives from large companies, as well as 90 NGO managers and other opinion groups.

The main areas evaluated to determine a company’s reputation were ethics and corporate responsibility. However, innovation, the working environment, economic-financial results, and corporate social and environmental responsibility also stand out as the most important values for determining a company’s reputation.

You will find Merco’s report at the following link.

Louis the Game, a video game. This proposal includes 30NFT embedded, so-called “non-fungible tokens”, with digital clothing that can only be enjoyed virtually. With this game LV invites us to enter the visionary mind of Louis Vuitton through Vivienne, a flower explorer, and explore the world of LV. With Vivienne we will be able to collect 200 birthday candles and learn about the LV brand through 6 worlds: Louis’ Forest, The Shining City, The Kingdom of Adventure, Monogram Island, The Metropolis of the Sun and The Birthday Extravaganza.

The Visionaries, an exhibition of trunks. 200 collaborators from different backgrounds and disciplines have been called upon to create their own interpretation of the brand’s iconic trunk. The pieces can be seen on display in LV shops around the world.

Looking for Louis, a documentary. This documentary traces the history of Louis Vuitton, from its humble origins to the creation of the LV brand, bringing the life of the genius to everyone and will be available from December on Apple TV’s Explore channel.

A fictional novel. French writer Carolina Bongrand is the author of this book about the life and purpose of Louis Vuitton. It will be published in English and French in October by Gallimard.

To learn more about Louis Vuitton, who is 200 years old, and about the most valuable luxury brand in the world in 2021 according to the Kantar Group, and to celebrate their birthday with them, you can access their website.

Image: Louis Vuitton The Game

In this regard, Article 101(1) TFEU provides that “any agreements between enterprises, decisions by associations of enterprises and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market and, in particular, those which consist in:

1. directly or indirectly fixing purchase or selling prices or other trading conditions;
2. limiting or controlling production, the market, technical development or investments;
3. to share markets or sources of supply;
4. to apply unequal conditions for equivalent services to third parties, causing them a competitive disadvantage;
5. to subordinate the conclusion of contracts to the acceptance by the other contracting parties of supplementary services which, by their nature or according to commercial usage, have no relation whatsoever with the object of such contracts.

Pursuant to Article L 420-1 of the French Commercial Code, it is provided that: “concerted actions, agreements, express or tacit understandings or coalitions, including through the direct or indirect intermediation of a group company located outside France, are prohibited when they have as their object or effect the prevention, restriction or distortion of competition on a market, in particular when they tend to:

1. Limit access to the market or the free exercise of competition by other companies;
2. To prevent the fixing of prices by the free play of the market by artificially favoring their rise or fall;
3. To limit or control production, stores, investments or technical progress; and,
4. share markets or sources of supply.”

In this sense, the French Competition Authority found that Luxottica had “recommended” prices to its distributors and encouraged them to maintain a certain level of retail prices for its products. In particular, Luxottica had executed selective distribution agreements with its distributors which provided for (1) encouraged to maintain a certain level of retail sales prices and discounts and promotions were prohibited; (2) imposed its distributors restrictions on price advertising; (3) carried out practices to control retail prices, soliciting the assistance of its distributors; (4) intervened with distributors who did not apply the established prices; and (5) penalized those who ignored its incentives by delaying deliveries to their stores or withdrawing their authorization to distribute some of its brands.

These antitrust practices are serious due to the repercussions of restricting free competition in the market, the consequences that these conducts have for end consumers and also due to the surveillance and retaliation mechanisms established for those distributors that do not follow the established rules and procedures.

It should be noted that although optical and eyewear products can be classified into two categories: (i) articles assimilated to medical devices, according to the Directive 93/42/EEC of 14 June 1993, such as corrective lenses, frames, and contact lenses and (ii) articles that are not medical devices, such as sunglasses, sports glasses and lens care products, this procedure refers only to prescription spectacle frames and sunglasses, not fitted with corrective lenses.

To understand this procedure and the decision of the French Competition Authority, it is necessary to consider how this sector is organized. Thus, three types of players can be involved in the manufacture and distribution of spectacle frames and sunglasses: brand owners, manufacturers, and distributors.

In terms of manufacturing, some companies, such as Luxottica and Mikli, manufacture the eyewear for the brands they own themselves. Others, such as Chanel, LVMH and Dior, prefer, or until recently preferred, to outsource the manufacture of eyewear sold under their brand to third party companies. In this case, they enter into a brand licensing or distribution agreement, granting the manufacturer an exclusive license to use their brand in the manufacture and wholesale of the products, in exchange for a royalty based on the turnover generated by such sales.

Notwithstanding the above, the major luxury houses have recently become involved in the production of frames, whereas they used to delegate this activity, and some of them have terminated their licensing agreements with certain manufacturers.

Regarding distribution, some brand owners have their own stores where they sell part of their products. However, this method remains marginal, and the parties concerned usually entrust the distribution of their products to the manufacturers who benefit from the operating license. Manufacturers, for their part, often use independent distributors for the distribution of their own or licensed products.

For certain brands, considered as “high-end” or “luxury”, selective distribution networks can be set up to protect the reputation and prestige of these brands. This type of distribution, which is based on a process of selection of sales stores, according to qualitative criteria, such as store equipment, location, product presentation and staff training, is often imposed on the manufacturer by means of brand licensing agreements.

Some eyewear distributors choose to operate as a franchise or branch of an optical chain or join a cooperative group. Others are independent and source their supplies through a central purchasing or referral center.

For the most part, sunglasses and optical eyewear are distributed through physical stores. Online sales have been developing since the early 2000s but are expected to account for only 4% of the market by value in 2020.

Over the last few years, the optical eyewear market has witnessed a wave of mergers and acquisitions, first, in 2018, between Essilor (at that time the world’s leading manufacturer and seller of eyewear) and Luxottica (the world’s leading manufacturer of eyewear), and then between the new entity resulting from this combination, EssilorLuxottica, and GrandVision (the European leader and number two worldwide in the retail distribution of optical and eyewear products), whose union ended on July 1, 2021. This merger also affected some online stores.

Consequently, the decision of the French Competition Authority resulted in the imposition of penalties on Chanel, Luxottica and LVMH as it considered that the clauses of the license agreements concluded between Chanel and Luxottica, on the one hand, and between LVMH and Logo, on the other hand, as well as the selective distribution agreements concluded between Luxottica and its authorized distributors for the Chanel, Prada, Dolce & Gabbana, and Bulgari brands, all prohibited the online sale of certain products and constituted serious anti-competitive restrictions.

To determine the penalty imposed on all these companies, the French Competition Authority took into account, first of all, the fact that such practices result in the closure of a marketing channel to the prejudice of consumers and distributors and limit competition, in particular intra-brand competition. On the contrary, the damage to the economy has also been considered to be limited in online sales due to the low demand for this sales channel in the sector, at least for eyeglass frames.

The following chart (taken from the decision adopted by the French Competition Authority) shows that the penalties-imposed amount to 125 million euros, and are as follows:

Therefore, the French Competition Authority has decided to sanction Luxottica and other brands for the conducts they carried out between 2005 and 2014 based mainly on encouraging the setting of a certain level of retail prices and pursuing and sanctioning distributors that did not comply with the rules set out in the licensing and distribution contracts they concluded with their distributors.

The dress code is a set of internal guidelines that identify the way to dress to align the image of a company’s employees with the company’s philosophy and strengthen its professional image.

Lawyers are the best prescribers of law firms they can reinforce the confidence of their clients and generate trust in their potential clients. Although the dress code is also a tool for the lawyers themselves by helping them to enhance their personal brand image.

The smart casual trend has been consolidated in law firms after the pandemic, although it had already begun to be implemented in the legal sector a few years ago. This dress code leaves behind the tie, suit and heels and replaces them with formal and elegant but more comfortable clothing, without forgetting to wear a jacket or blazer.

Teleworking, the increased use of social networks by offices and professionals and the drastic reduction in the number of face-to-face meetings have allowed this dress code to be implemented more quickly.

In this article we highlight that:

“All firms should bear in mind that the dress code is an investment that generates value for the firm, by reinforcing the corporate culture and transmitting it through its best prescribers, which are the lawyers who are part of it.”

“The message conveyed is one of adaptation to change and closeness of the sector to its target public, but without affecting the quality, seriousness and professionalism characteristic of this sector”.

Read the full article here (pages 54 to 57)

Today, this “chain of blocks” technology has begun to be adopted by multiple industries interested in promoting transparency, security, and responsible production, among which is the fashion industry.

What would be the advantages of using blockchain technology for companies in the sector?

• Providing transparency in the supply chain

The supply chain of an apparel product can be carried out separately in several countries. For this reason, it is difficult for brands to control which materials are used in this process.

With this technology, companies can track the entire production phase, from the shipment of raw materials to the factory to the moment when the product is finished and enters the distribution channel, to be finally delivered to the buyer.

For their part, consumers, through product labels (tag blockchain), can access the history of the clothing instantly through a QR code or an RFID tag and find out where it was made, who made it, what materials were used, etc.

The use of this technology provides transparency to both the manufacturer and its customers by allowing product traceability and real-time access to information, responding to the demand for information requested by the market. This transparency can become a factor of choice for those customers who increasingly seek to know how and where the clothing they buy has been manufactured and under what standards of sustainability and quality or even the compliance with the applicable regulations throughout the manufacturing process.

In addition, the delocalized nature of this technology means that records cannot be altered, lost or destroyed.

• Avoiding product counterfeiting

Blockchain technology can be useful to digitally authenticate a product, allowing as we have already indicated to verify by the owner, distributor or retailer and buyers the detail of the production chain, the value creation that the product has undergone in each of its phases, and the complexity of the manufacturing process, putting in value the brand and the product.

Moreover, the application of this technology allows designers to document each step of the design process, generating unalterable proof of their authorship. Brand owners who license their designs can even rely on this technology to track sales and royalty payments derived from the use of their licenses.

• Improve efficiency and reduce operating costs

The use of blockchain eliminates intermediaries, improves the efficiency of the processes by automating them and reduces operating costs, allowing the management of inventories and the supply chain in a more agile way than the traditional one.

In this way, the use of blockchain technology improves business control by companies by reducing their costs, risks and the impact of any aspect that may arise from the process of production and marketing of the product.

An example of its use in the sector can be found in the presentation of Aura Blochain Consortium, last April 20, which is the first blockchain in the luxury sector, developed by LVMH together with Prada and Richemont (Cartier). This collaboration begins in September 2019 when they had a meeting in Paris to develop a blockchain platform with Microsoft and Consensys that would allow them to verify the authenticity and provenance of their products.

“We were talking about every point together, such as, what is the appropriate legal entity? what are the governing principles?”, says Timothy Iwata Durie, Cartier’s global innovation director, who participated in the discussions. (Vogue Business)

The result of this collaboration is Aura Blockchain Consortium, a blockchain for private use, which allows its use only to the companies of the network, being the data of the brands and customers accessible only to each brand, and on the other hand for open use, to any brand in the luxury sector that wishes to become part of it.

Aura identifies the products by assigning to each one of them a unique digital identity that holds information about the origin and ownership of the products, allows access to information about the history of these and even performs a post-sale follow-up, such as, for example, the rental and resale of the products, a very useful aspect now that the sale of second-hand clothing is a booming practice now.

However, Aura’s technology also joins others in the sector such as: Arianee, which works with Bas&sh, Audemars Piguet, Vacheron Constantin and VeChain, which have worked with Givenchy and H&M.

Consequently, the use of this type of technology and the collaborations that various brands in the sector are carrying out shows us a change in the mentality of the industry to offer companies in the sector more security and efficiency in their processes while offering their customers a more responsible and informed purchase of their products.

To this end, three areas of compliance should be considered:

• The Articles of Association shall state whether or not the position of director is remunerated and the applicable remuneration system. When the position of director is remunerated, the Articles of Association must set out exactly what remuneration the directors receive. For example, fixed remuneration, attendance fees, variable remuneration, in which case reference parameters for its calculation should be mentioned, profit-sharing, share-based remuneration, severance pay, and savings or welfare systems must be included. In addition, the remuneration system for managing directors and those directors who perform executive functions must be provided for. In this case, the Articles of Association may include an open list of the remuneration items that may be applicable, indicating that one or more of the following shall apply.
•  The general meeting shall approve the maximum annual remuneration of all directors, and, in the event of a board meeting, the board shall distribute it among its members. The maximum amount of annual remuneration of all directors approved by the general meeting shall remain in force until it is amended and shall be in reasonable proportion to the size of the company, its financial position at any given time and the market standards of comparable companies. Unless otherwise provided by the General Meeting or the Articles of Association, this maximum amount shall be distributed by resolution of the directors and, in the case of the board of directors, by decision of the board of directors.
• The company should enter into a contract with the director who exercise delegated or executive functions, which should be approved by the board. This contract shall be submitted to the board of directors for approval and must be attached as an annex to the minutes of the meeting. The majority required for approval is two-thirds (2/3) of its members. The director concerned must abstain from attending the deliberation and from voting the agreement. The contract shall detail all the items comprising the director’s remuneration for the performance of his executive or delegated duties, and he may not receive other remuneration for items other than those stipulated in the contract.

Therefore, as followers of Fashion Business Lawyer, we recommend you to review the remuneration system of the board of directors of your company and check whether: (i) you have included in your company’s Articles of Association the items of remuneration received by the directors; (ii) you have submitted the maximum amount of remuneration for all the directors for approval by the General Meeting and, if applicable, whether this is updated and distributed appropriately within the Board; and, (iii) if your company has directors who exercise delegated or executive functions, check if the company has entered into a contract with the managing or executive director under the aforementioned terms.